Volaris* (NYSE:VLRS and BMV:VOLAR), the ultra-low-cost airline
serving Mexico, the United States and Central America, today
announced its financial results for the second quarter 2016.
The following financial information, unless otherwise indicated,
is presented in accordance with International Financial Reporting
Standards (IFRS).
Second Quarter 2016 Highlights
- Total operating revenues reached
Ps.5,131 million for the second quarter, an increase of 25.2% year
over year.
- Non-ticket revenues were Ps.1,317
million for the second quarter, an increase of 34.7% year over
year. Non-ticket revenues per passenger for the second quarter were
Ps.362, increasing 6.6% year over year.
- Total operating revenues per available
seat mile (TRASM) rose to Ps.128.9 cents for the second quarter, an
increase of 4.8% year over year.
- Operating expenses per available seat
mile (CASM) were Ps.119.2 cents for the second quarter, an increase
of 5.9% year over year.
- Adjusted EBITDAR was Ps.1,819 million
for the second quarter, an increase of 42.1% year over year.
Adjusted EBITDAR margin was 35.5% for the second quarter, a margin
expansion of 4.3 percentage points.
- Operating income was Ps.388 million for
the second quarter, with an operating margin of 7.6%, equal to a
year over year operating margin decrease of 0.9 percentage
points.
- Net income was Ps.935 million (Ps.0.92
per share / US$0.49 per ADS) for the second quarter, with a net
margin of 18.2%, a year over year margin increase of 9.6 percentage
points.
- Net increase of cash and cash
equivalents was Ps.564 million for the second quarter. As of June
30, 2016, unrestricted cash and cash equivalents were Ps.6,930
million.
Volaris´ CEO Enrique Beltranena commented: “Volaris’ performance
highlights the resilience of its ULCC model that combines high
growth, expanding unit revenue, and managing unit costs down. These
results reflect our ability to stimulate demand with low base
fares, successfully switch bus passengers to air travel and further
unbundle our product offering. We will work to continue balancing
our growth with profitability to create shareholder value.”
Solid Demand Supports Traffic Volume Growth, Despite Exchange
Rate and Fuel Price Volatility
- Air traffic volume increase: The
Mexican DGAC reported overall passenger volume growth for Mexican
carriers of 9.0% year over year in April and May. Domestic
passenger volume increased 9.2%, while international passenger
volume increased 8.2%.
- Exchange rate volatility: The Mexican
peso depreciated 17.9% year over year against the US dollar, from
an average of Ps.15.31 pesos per US dollar in the second quarter
2015 to Ps.18.05 pesos per US dollar during the second quarter
2016.
- Lower fuel prices: The average economic
fuel cost per gallon decreased 8.6% to Ps.28.3 per gallon (US$1.5)
in the second quarter 2016, year over year.
Unit Revenue Improvements Driven by Volume and Non-Ticket
Revenue Expansion, Despite Adverse Seasonality
- Passenger traffic stimulation:
Volaris booked 3.6 million passengers in the second quarter of
2016, up 26.4% year over year. Volaris traffic (measured in terms
of revenue passenger miles, or RPMs) increased 24.0% for the same
period.
- Unit revenue improvement and demand
driven capacity growth: For the second quarter of 2016, TRASM
increased 4.8%, while yield decreased 1.5%, year over year. During
the second quarter, in terms of ASMs, domestic capacity grew 19.3%,
while international capacity increased 19.9% responding to a strong
demand from both markets. This was accomplished despite the effects
of adverse seasonality due to high traffic in Holy and Easter weeks
falling in the first quarter, unlike 2015 when they fell
predominantly in the second quarter. System load factor during the
quarter increased 3.2 percentage points year over year to
86.1%.
- Non-ticket revenues growth:
Non-ticket revenues and non-ticket revenues per passenger increased
34.7% and 6.6% year over year for the second quarter of 2016,
respectively. The Company has been expanding its product offering
and improving its presence in mobile, web and airport kiosks, while
more dynamically pricing its ancillaries.
- New routes: In the second
quarter 2016, Volaris launched eight new routes, six domestic and
two international.
Exchange Rate Pressures Challenge Fuel Savings
In the second quarter 2016, Volaris continued to experience
pressure in US-dollar denominated costs, such as aircraft and
engine rent expenses, international airport costs, and maintenance
expenses due to the depreciation of the Mexican peso. The CASM for
the second quarter was Ps.119.2 cents, a 5.9% increase compared to
the second quarter 2015, mainly driven by FX pressures.
Young and Fuel Efficient Fleet Supporting Lower Operating
Costs
During the second quarter, the Company incorporated five
additional aircraft comprised of three A320s and two A321s. As of
June 30, 2016, Volaris fleet was composed of 64 aircraft (18 A319s,
42 A320s and 4 A321s), with an average age of 4.5 years. At the end
of the second quarter 2016 Volaris’ fleet had an average of 171
seats per aircraft, an increase from 168 seats in the second
quarter of 2015, and 51% of our seats were in sharklet-equipped
aircraft.
Cash Flow Generation, Solid Balance Sheet and Good
Liquidity
The net increase in cash and cash equivalents was equal to
Ps.564 million during the second quarter, mainly driven by positive
operating cash flow of Ps.194 million and by net foreign exchange
differences on cash balance by Ps.409 million. As of June 30, 2016,
Volaris’ unrestricted cash and cash equivalents balance was
Ps.6,930 million. Volaris registered negative net debt (or a
positive net cash position) of Ps.6,109 million and total equity of
Ps.8,611 million.
Active in Fuel Risk Management
Volaris remains active in its fuel risk management program.
Volaris utilized call options to hedge 62% of its second quarter
2016 fuel consumption, at an average strike price of US $1.95 per
gallon, which combined with the 38% unhedged consumption, resulted
in a blended average economic fuel cost of US$1.50 per gallon.
Investors are urged to carefully read the Company's periodic
reports filed with or furnished to the Securities and Exchange
Commission, for additional information regarding the Company.
Conference Call/Webcast Details:
Presenters for the Company: Mr. Enrique Beltranena,
CEO Mr. Fernando Suárez, CFO Date: Friday, July 22, 2016
Time: 10:00 am U.S. EDT (9:00 am Mexico City Time) United States
dial in (toll free): 1-800-311-9408 Mexico dial in (toll free):
0-1-800-847-7666 Brazil dial in (toll free): 0800-282-5781
International dial in: +1-334-323-7224 Participant entry number:
83342 Webcast will be available on our website:
https://www.webcaster4.com/Webcast/Page/1174/15984
About Volaris:
*Controladora Vuela Compañía de Aviación, S.A.B. de C.V.
(“Volaris” or the “Company”) (NYSE: VLRS and BMV: VOLAR), is an
ultra-low-cost carrier, with point-to-point operations, serving
Mexico, the United States and Central America. Volaris offers low
base fares to build its market, providing quality service and
extensive customer choice. Since beginning operations in March
2006, Volaris has increased its routes from five to more than 154
and its fleet from four to 64 aircraft. Volaris offers more than
286 daily flight segments on routes that connect 40 cities in
Mexico and 25 cities in the United States and Central America with
the youngest fleet in Mexico. Volaris targets passengers who are
visiting friends and relatives, cost-conscious business people and
leisure travelers in Mexico and to select destinations in the
United States and Central America. Volaris has received the ESR
Award for Social Corporate Responsibility for six consecutive
years. For more information, please visit: www.volaris.com
Forward-looking Statements:
Statements in this release contain various forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended, which represent the Company's expectations or
beliefs concerning future events. When used in this release, the
words "expects," "estimates," "plans," "anticipates," "indicates,"
"believes," "forecast," "guidance," "outlook," "may," "will,"
"should," "seeks," "targets" and similar expressions are intended
to identify forward-looking statements. Similarly, statements that
describe the Company's objectives, plans or goals, or actions the
Company may take in the future, are forward-looking statements.
Forward-looking statements include, without limitation, statements
regarding the Company's intentions and expectations regarding the
delivery schedule of aircraft on order, announced new service
routes and customer savings programs. All forward-looking
statements in this release are based upon information available to
the Company on the date of this release. The Company undertakes no
obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events,
or otherwise. Forward-looking statements are subject to a number of
factors that could cause the Company's actual results to differ
materially from the Company's expectations, including the
competitive environment in the airline industry; the Company's
ability to keep costs low; changes in fuel costs; the impact of
worldwide economic conditions on customer travel behavior; the
Company's ability to generate non-ticket revenues; and government
regulation. Additional information concerning these and other
factors is contained in the Company's Securities and Exchange
Commission filings.
Controladora Vuela Compañía de
Aviación, S.A.B. de C.V. and Subsidiaries
Financial and Operating Indicators
Three months
ended June 30,
Three months
Three months
Unaudited 2016 ended June 30, ended June
30, Variance (In Mexican pesos, except otherwise
indicated) (US Dollars)* 2016 2015
(%) Total operating revenues (millions) 271 5,131 4,099
25.2% Total operating expenses (millons) 251 4,743 3,750 26.5% EBIT
(millions) 21 388 349 11.2% EBIT margin 7.6% 7.6% 8.5% (0.9) pp
Adjusted EBITDA (millions) 28 526 474 11.0% Adjusted EBITDA margin
10.3% 10.3% 11.6% (1.3) pp Adjusted EBITDAR (millions) 96 1,819
1,281 42.1% Adjusted EBITDAR margin 35.5% 35.5% 31.2% 4.3 pp Net
income (millions) 49 935 351 >100% Net margin 18.2% 18.2% 8.6%
9.6 pp
Earnings per share: Basic (pesos) 0.05 0.92 0.35
>100% Diluted (pesos) 0.05 0.92 0.35 >100%
Earnings per
ADS: Basic (pesos) 0.49 9.24 3.47 >100% Diluted (pesos) 0.49
9.24 3.47 >100%
Weighted average shares outstanding:
Basic - 1,011,876,677 1,011,876,677 0.0% Diluted -
1,011,876,677 1,011,876,677 0.0%
Available seat miles (ASMs)
(millions)(1)
- 3,980 3,332 19.4% Domestic - 2,819 2,364 19.3% International -
1,161 969 19.9%
Revenue passenger miles (RPMs)
(millions)(1)
- 3,428 2,764 24.0% Domestic
-
2,421 1,944 24.6% International - 1,007 820 22.8%
Load factor(2)
- 86.1% 82.9% 3.2 pp Domestic - 85.9% 82.2% 3.7 pp International
- 86.7% 84.5% 2.2 pp
Total operating revenue per ASM (TRASM)
(cents)(1)
6.8 128.9 123.0 4.8%
Passenger revenue per ASM (RASM)
(cents)(1)
5.1 95.8 93.7 2.3%
Passenger revenue per RPM (Yield)
(cents)(1)
5.9 111.3 113.0 (1.5%)
Average fare(2)
55.6 1,052 1,087 (3.2%)
Non-ticket revenue per passenger (1)
19.1 362 339 6.6%
Operating expenses per ASM (CASM)
(cents)(1)
6.3 119.2 112.5 5.9%
Operating expenses per ASM (CASM) (US
cents)(1)
- 6.3* 7.2* (12.8%)
CASM ex fuel (cents)(1)
4.5 85.0 76.3 11.4%
CASM ex fuel (US cents)(1)
- 4.5* 4.9* (8.3%)
Booked passengers (thousands)(1)
- 3,640 2,880 26.4%
Departures(1)
- 24,919 21,187 17.6%
Block hours(1)
- 65,520 55,067 19.0%
Fuel gallons consumed (millions)
- 48.0 39.0 23.1% Average economic fuel cost per gallon 1.5 28.34
31.01 (8.6%) Aircraft at end of period - 64 53 20.8% Average
aircraft utilization (block hours) - 12.5 12.5 0.4% Average
exchange rate - 18.05 15.31 17.9% End of period exchange rate
- 18.91 15.57 21.5% *Peso amounts were
converted to U.S. dollars at end of period exchange rate for
convenience purposes only (1) Includes schedule + charter (2)
Includes schedule
Controladora Vuela Compañía de
Aviación, S.A.B. de C.V. and Subsidiaries
Financial and Operating Indicators
Six months
ended June 30,
Six months
Six months
Unaudited 2016
ended June 30,
ended June 30,
Variance (In Mexican pesos, except otherwise
indicated) (US Dollars)*
2016
2015
(%) Total operating revenues (millions) 545 10,313 7,867
31.1% Total operating expenses (millons) 481 9,089 7,172 26.7% EBIT
(millions) 65 1,224 695 76.0% EBIT margin 11.9% 11.9% 8.8% 3.1 pp
Adjusted EBITDA (millions) 78 1,482 923 60.5% Adjusted EBITDA
margin 14.4% 14.4% 11.7% 2.7 pp Adjusted EBITDAR (millions) 211
3,994 2,485 60.7% Adjusted EBITDAR margin 38.7% 38.7% 31.6% 7.1 pp
Net income (millions) 81 1,536 658 >100% Net margin 14.9% 14.9%
8.4% 6.5 pp
Earnings per share: Basic (pesos) 0.08 1.52 0.65
>100% Diluted (pesos) 0.08 1.52 0.65 >100%
Earnings per
ADS: Basic (pesos) 0.80 15.18 6.50 >100% Diluted (pesos)
0.80 15.18 6.50 >100%
Weighted average shares
outstanding: Basic - 1,011,876,677 1,011,876,677 0.0% Diluted -
1,011,876,677 1,011,876,677 0.0%
Available seat miles (ASMs)
(millions)(1)
- 7,872 6,375 23.5% Domestic - 5,549 4,489 23.6% International -
2,323 1,886 23.2%
Revenue passenger miles (RPMs)
(millions)(1)
- 6,735 5,199 29.5% Domestic - 4,739 3,663 29.4%
International
- 1,996 1,536 29.9%
Load factor(2)
- 85.6% 81.5% 4.1 pp Domestic - 85.4% 81.6% 3.8 pp International
- 85.9% 81.3% 4.6 pp
Total operating revenue per ASM (TRASM)
(cents)(1)
6.9 131.0 123.4 6.2%
Passenger revenue per ASM (RASM)
(cents)(1)
5.2 98.1 94.8 3.4%
Passenger revenue per RPM (Yield)
(cents)(1)
6.1 114.6 116.3 (1.4%)
Average fare(2)
58 1,095 1,123 (2.5%)
Non-ticket revenue per passenger (1)
19.4 367 338 8.4%
Operating expenses per ASM (CASM)
(cents)(1)
6.1 115.5 112.5 2.6%
Operating expenses per ASM (CASM) (US
cents)(1)
-
6.1* 7.2* (15.5%)
CASM ex fuel (cents)(1)
4.5
85.3 77.1 10.7%
CASM ex fuel (US cents)(1)
- 4.5* 4.9* (8.9%)
Booked passengers (thousands)(1)
- 7,070 5,391 31.1%
Departures(1)
- 48,980 40,500 20.9%
Block hours(1)
- 130,389 105,763 23.3% Fuel gallons consumed (millions) - 93.8
74.3 26.2% Average economic fuel cost per gallon 1.3 25.3 30.4
(16.8%) Aircraft at end of period - 64 53 20.8% Average aircraft
utilization (block hours) - 12.8 12.3 4.2% Average exchange rate -
18.05 15.31 17.9% End of period exchange rate - 18.91
15.57 21.5% *Peso amounts were converted to U.S.
dollars at end of period exchange rate for convenience purposes
only (1) Includes schedule + charter (2) Includes schedule
Controladora Vuela Compañía de
Aviación, S.A.B. de C.V. and Subsidiaries
Consolidated Statement of Operations
Three months ended June 30, Three
months Three months Unaudited 2016
ended June 30, ended June 30, Variance (In
millions of Mexican pesos) (US Dollars)* 2016
2015 (%) Operating revenues: Passenger 202
3,814 3,122 22.2% Non-ticket 70 1,317 977 34.7%
271
5,131 4,099 25.2% Other operating
income (9) (174) (37) >100% Fuel 72 1,360 1,209 12.5% Aircraft
and engine rent expenses 68 1,293 807 60.3% Landing, take-off and
navigation expenses 38 724 607 19.3% Salaries and benefits 31 580
448 29.3% Maintenance expenses 16 306 198 54.5% Sales, marketing
and distribution expenses 16 300 232 29.2% Other operating expenses
11 216 162 33.5% Depreciation and amortization 7 138 125 10.5%
Operating expenses 251 4,743 3,750
26.5% Operating income 21 388
349 11.2% Finance income 1 20 12 56.8% Finance
cost - (8) (6) 40.1% Exchange gains, net 49 923 146 >100%
Comprehensive financing result 49 935
153 >100% Income before income tax
70 1,323 502 >100% Income tax
expense (21) (388) (151) >100%
Net income 49
935 351 >100% Attribution of net
income: Equity holders of the parent 49 935 351 >100%
Non-controlling interest - - - 0%
Net income
49 935 351
>100% *Peso amounts were converted to U.S. dollars at end
of period exchange rate for convenience purposes only.
Controladora Vuela Compañía de
Aviación, S.A.B. de C.V. and Subsidiaries
Consolidated Statement of Operations
Six months
ended June 30,
Six months
Six months
Unaudited
2016
ended June 30,
ended June 30,
Variance (In millions of Mexican pesos) (US
Dollars)*
2016
2015
(%) Operating revenues: Passenger 408 7,720 6,044
27.7% Non-ticket 137 2,593 1,823 42.2%
545 10,313
7,867 31.1% Other operating income (20) (369)
(61) >100% Fuel 126 2,374 2,260 5.0% Aircraft and engine rent
expenses 133 2,513 1,562 60.9% Landing, take-off and navigation
expenses 80 1,514 1,180 28.3% Salaries and benefits 60 1,143 872
31.1% Maintenance expenses 34 646 379 70.3% Sales, marketing and
distribution expenses 31 595 448 32.9% Other operating expenses 22
416 304 36.9% Depreciation and amortization 14 258 228 13.1%
Operating expenses 481 9,089 7,172
26.7% Operating income 65 1,224
695 76.0% Finance income 3 54 22 >100%
Finance cost (1) (15) (10) 51.9% Exchange gains, net 49 932 233
>100%
Comprehensive financing result 51 971
244 >100% Income before income tax
116 2,195 939 >100% Income tax
expense (35) (658) (282) >100%
Net income 81
1,536 658 >100% Attribution of net
income: Equity holders of the parent 81 1,536 658 >100%
Non-controlling interest - - - 0%
Net income
81 1,536 658
>100% *Peso amounts were converted to U.S. dollars at end
of period exchange rate for convenience purposes only.
Controladora Vuela Compañía de Aviación,
S.A.B. de C.V. and SubsidiariesAdjusted EBITAR
Reconciliation
The Company is providing a reconciliation of GAAP financial
information to non-GAAP financial information as it believes that
non-GAAP financial measures provide management and investors the
ability to measure the performance of the Company on a consistent
basis. These non-GAAP financial measures have limitations as an
analytical tool.
Unaudited
Three monthsended June
30,2016
Three monthsended June
30,2016
Three monthsended June
30,2015
(In millions of Mexican pesos) (US Dollars)*
Reconciliation: Net (loss) income 49 935 351 Plus (minus):
Finance cost - 8 6 Finance income (1) (20) (12) Provision for
income tax 21 388 151 Depreciation and amortization 7 138 125
EBITDA 76 1,449 620 Exchange (gain)
loss, net (49) (923) (146)
Adjusted EBITDA 28
526 474 Aircraft and engine rent expense 68 1,293 807
Adjusted EBITDAR 96 1,819
1,281 Unaudited
Six monthsended June
30,2016
Six monthsended June
30,2016
Six monthsended June 30,
2015
(In millions of Mexican pesos) (US Dollars)*
Reconciliation: Net (loss) income 81 1,536 658 Plus (minus):
Finance cost 1 15 10 Finance income (3) (54) (22) Provision for
income tax 35 658 282 Depreciation and amortization 14 258 228
EBITDA 128 2,414 1,156 Exchange (gain)
loss, net (49) (932) (233)
Adjusted EBITDA 78
1,482 923 Aircraft and engine rent expense 133 2,513
1,562
Adjusted EBITDAR 211 3,994
2,485
*Peso amounts were converted to U.S. dollars at end of period
exchange rate for convenience purposes only
Controladora Vuela Compañía de Aviación,
S.A.B. de C.V. and Subsidiaries
Consolidated Statement of Financial
Position
June 30, 2016 Unaudited June 30, 2016
December 31, 2015 (In millions of Mexican pesos)
(US Dollars)* Unaudited Audited Assets
Cash and cash equivalents 366 6,930 5,157 Accounts receivable 49
926 464 Inventories 10 185 163 Prepaid expenses and other current
assets 25 482 585 Financial instruments 8 155 10 Guarantee deposits
62 1,170 861
Total current assets 521 9,848
7,241 Rotable spare parts, furniture and equipment, net 99
1,864 2,550 Intangible assets, net 5 98 95 Financial instruments 26
486 69 Deferred income tax 29 544 545 Guarantee deposits 290 5,485
4,704 Other assets 3 53 58
Total non-current assets
451 8,531 8,020 Total assets 972
18,380 15,261 Liabilities Unearned
transportation revenue 159 3,006 1,957 Accounts payable 36 682 795
Accrued liabilities 102 1,937 1,471 Other taxes and fees payable 69
1,309 1,107 Income taxes payable 35 654 338 Financial instruments 2
39 44 Financial debt 21 395 1,371 Other liabilities 1 17 19
Total short-term liabilities 425 8,039
7,103 Financial instruments - - 11 Financial debt 22 425 220
Accrued liabilities 12 222 157 Other liabilities 4 80 49 Employee
benefits 1 12 10 Deferred income taxes 52 991 885
Total
long-term liabilities 91 1,729 1,333
Total liabilities 517 9,769 8,436
Equity Capital stock 157 2,974 2,974 Treasury shares (5)
(95) (91) Contributions for future capital increases - - - Legal
reserve 2 38 38 Additional paid-in capital 95 1,792 1,791 Retained
earnings 209 3,945 2,408 Accumulated other comprehensive losses (2)
(43) (295)
Total equity 455 8,611 6,825
Total liabilities and equity 972 18,380
15,261 Total shares outstanding fully diluted
1,011,876,677 1,011,876,677
*Peso amounts were converted to U.S. dollars at end of period
exchange rate for convenience purposes only
Controladora Vuela Compañía de Aviación, S.A.B. de C.V.
and Subsidiaries
Consolidated Statement of Cash Flows –
Cash Flow Data Summary
Three months
ended June 30,
Three months
Three months
Unaudited
2016
ended June 30,
ended June 30,
(In millions of Mexican pesos) (US Dollars)*
2016
2015
Net cash flow provided by operating activities 10 194 947
Net cash flow provided by (used in) investing activities 17 331
(281) Net cash flow (used in) provided by financing activities (20)
(370) 151
Increase in cash and cash equivalents 8
155 817 Net foreign exchange differences on cash
balance 22 409 55 Cash and cash equivalents at beginning of period
337 6,366 3,156
Cash and cash equivalents at end of period
366 6,930 4,028 *Peso
amounts were converted to U.S. dollars at end of period exchange
rate for convenience purposes only
Six months
ended June 30,
Six months
Six months
Unaudited
2016
ended June 30,
ended June 30,
(In millions of Mexican pesos) (US Dollars)*
2016
2015
Net cash flow provided by operating activities 81 1,523
1,896 Net cash flow provided by (used in) investing activities 41
766 (331) Net cash flow (used in) provided by financing activities
(49) (919) 115
Increase in cash and cash equivalents
72 1,371 1,679 Net foreign exchange
differences on cash balance 21 402 83 Cash and cash equivalents at
beginning of period 273 5,157 2,265
Cash and cash equivalents at
end of period 366 6,930
4,028 *Peso amounts were converted to U.S. dollars at end of
period exchange rate for convenience purposes only
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160722005140/en/
Investor Relations:Andrés Pliego & Diana Martínez,
+52 55 5261 6444Investor
Relationsir@volaris.comorMedia:Cynthia Llanos, +52 1 55 4577
0803cllanos@gcya.net
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